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EA cuts staff in attempt to reduce costs

In the wake of buying Playfish for $300 million, Electronic Arts has cut 1,500 …

Just one day after announcing the acquisition of social gaming giant Playfish, Electronic Arts has cut a large number of staff in a "cost reduction plan." The plan will result in several closed facilities and approximately 1,500 lost jobs.

EA hasn't revealed which studios have been affected by the layoffs, though rumors suggest that EA Tiburon, EA Redwood Shores, Mythic Entertainment, and Blackbox Studios have all seen cuts. "This plan will result in annual cost savings of at least $100 million and restructuring charges of $130 to $150 million," the company said in a statement. This appears to be largely due to a $391 million quarterly loss, up 26% from last year.

It also appears that the company may be canceling some in-development titles, though no specifics were revealed, as it announced "a plan to narrow its product portfolio to provide greater focus on titles with higher margin opportunities."

It wasn't all negative news though, as the company also announced an increase in non-GAAP earnings, which totaled $1.147 billion for the quarter ending September 30, up 2% from 2008. This was due largely to the success of a pair of EA Sports titles, as Madden NFL 10 was the top-selling game in North America and FIFA 10 moved 4.5 million units in its first week of release in Europe.

It's never good news to hear of people losing their jobs, especially in such large numbers. Ars sends its condolences to all of the laid-off employees, wishing them a speedy recovery.

It's extremely sad that just when they actually start improving the quality of their products and trying new things, boom, they lose money. Yea, it's a tough economy, but the people making decisions will just compare year by year performance and conclude F with new ideas, quality and IP.. let's go back to our old yearly updates way! Sad to me too because the only EA games I've purchased since the days of Bullfrog have been some of their new IP such as Dead Space and Dragon Age (I know Dragon Age is a BioWare release, but EA owns them now, and I hope this doesn't mean that EA runs them to the ground as they did to Origin, Westwood, etc.)

Originally posted by Mortus:Perhaps they need to start taking a look at the quality of their games and stop worrying about quantity.

I definitely get the feeling that's where EA will move based on their releases for the past year. The quality has definitely increased in my opinion at least. Anecdotally, I haven't bought any EA titles for years until '09 in which I bought 2. Amazing.

Historically, they loved to purchase developers only to gut them and eventually that has to come back and haunt you. Maybe that's what we are seeing now? The effects of short term profit strategies without looking into the future. But then the gaming industry as a whole has seen better days.

Kotick's the Activision guy, not EA's. Sad that Activision is now acting exactly as EA used to be and they're rolling in the dough. Meanwhile, EA cleans up their act and they suffer. We're not sending them the right message guys...

EA buys up everyone in the economic boom. Economy slows down, they do lay offs. Those laid off form new companies and create new content, some of which does well financially as the economy improves. EA buys them out during that boom.

So the next year's worth of titles will be <insert sport abbreviation> <insert year> or Need For Speed <insert odd "cool" word>, right? I guess this means we're back to me not buying anything from EA again - and apparently most of their customers getting what they really want anyway.

It's kind of sad to realise that more of the same seems to be where the money is, and typical readers of AT:OT who want innovation are in the seemingly irrelevant minority.

Originally posted by silverthornne:Kotick's the Activision guy, not EA's. Sad that Activision is now acting exactly as EA used to be and they're rolling in the dough. Meanwhile, EA cleans up their act and they suffer. We're not sending them the right message guys...

Shame to hear that Redwood Shores/Visceral are seeing cuts. Dead Space was one of my favourite games from the last year or so, plus I'm looking forward to Dante's Inferno - seems to be some good stuff coming out of that studio (though of course there's always a chance that Dante's Inferno could turn out to be shit... doubt it though).

Even if EA is making some of the right moves recently, they are still DRM whore. Moreover than that I think it is to little to late. They have built a pretty shitty rep at this point, and many people refuse to buy anything that has EA on it.

Consumers have bitched hard enough about EA messing them about. Can't say EA were not warned by the paying public. It is because of EA and the whole Sony thing that ANYTIME I think about buying a game I look into the DRM side of things first. Its sad indication of how PC gamming consumers are dealt with that this even needs to be considered.

Given that the age/income of the average PC gamer has increased over the years, it was not a really wise idea of EA to try to piss them off. While I hate to see anyone lose their job in these hard times hopefully these guys and girls can find employment working for a company that gives a crap about how its consumers are treated.

EA publishes some oustanding titles, however once I see EA attached to a game, I dont even bother with a second look nowdays.

I sense a lot of great games coming out for OS X Mobile and Xbox Live. Maybe they'll find life as an independent isn't all so bad. Sucks to be unemployed. I've been there-- and I really feel for themif they have family to take care of.